It’s All Eyes on the Pound, with Brexit and a Busy Economic Calendar in Focus

The Pound is in focus today, with key stats to influence sentiment towards BoE monetary policy. Brexit will also be in focus on the day.
Bob Mason

Earlier in the Day:

It was a quiet day on the Asian economic calendar in the earlier hours of this morning. There were no material stats to provide direction through the early part of the day.

The lack of stats left the markets to respond to Friday’s nonfarm payroll and wage growth figures from Friday.

Outside of the numbers, geopolitics remained in focus.

Iran’s admission to the unintentional downing of the Ukrainian passenger plane last week and fresh sanctions on Iran failed to test risk appetite early on.

For U.S President Trump, street protests in response to Tehran’s admission couldn’t have come at a better time as he looks to turn the screw.

For the Majors

At the time of writing, the Japanese Yen was down by 0.16% to ¥109.62 against the greenback. The Aussie Dollar was up by 0.17% to $0.6913, with the Kiwi Dollar up by 0.12% to $0.6639.

The Day Ahead:

For the EUR

It’s a quiet day ahead on the economic calendar. There are no material stats due out of the Eurozone to provide the EUR with direction.

The lack of stats will leave the EUR in hands of geopolitics.

There’s Brexit, the Middle East, Trump’s impeachment and the phase 1 trade agreement in focus this week.

At the time of writing, the EUR was up by 0.01% to $1.1122.

For the Pound

It’s a particularly busy day ahead on the economic calendar. Key stats include industrial and manufacturing production figures and GDP numbers.

We will expect November trade figures, also due out, to have less influence on the day.

Last week, BoE Governor Carney sent the Pound on a slide. Positive numbers today would ease expectations of a near-term move by the BoE.

While the stats will influence, expect Brexit chatter to continue to drive the Pound. Concerns over Johnson’s ability to secure an EU free trade agreement will likely linger near-term to pressure the Pound.

At the time of writing, the Pound was down by 0.22% to $1.3035.

Across the Pond

It’s a quiet day on the data front, with no material stats scheduled for release to provide the Dollar with direction.

A lack of stats will leave the Dollar in the hands of the U.S administration on the day.

Any chatter on trade and or Iran will influence on the day.

The Dollar Spot Index was up by 0.04% to 97.396 at the time of writing.

For the Loonie

It’s a relatively quiet day on the economic calendar. While there are no material stats scheduled for release, the BoC will release its Business Outlook Survey later this afternoon.

With economic indicators out of Canada having been mixed of late, the Survey will garner plenty of attention.

The Bank of Canada will also release its consumer expectations survey for the first time. How the BoC sees consumer and business sentiment will give some idea on whether the BoC will continue to stand pat on policy.

In October, the Business Outlook Survey had reflected some improvement in business sentiment. With the U.S and China on the cusp of signing a phase 1 agreement and the USMCA wrapped up, there should be some further improvement…

A bounce back in employment in December, leading to a fall in the unemployment rate should also support a more positive outlook.

The Loonie was down by 0.02% to C$1.3053 against the U.S Dollar, at the time of writing.

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